Perfecting institutions needed to rev up economy: Experts
Pushing through institutional reforms is desperately needed to achieve breakthroughs in the nation’s economic growth, especially during its path toward global economic integration, according to experts at a conference in HCMC on Tuesday.
The Vietnam Economic Times, in cooperation with some ministries and agencies, held the annual Vietnam Economic Conference, called “Breakthrough from Growth Drivers” for the 12th time. It gathered executives from more than 300 local and foreign firms.
Participants said the intensive integration into the global economy has enabled Vietnam to perfect institutions and align them with international norms. The participation in global supply chains has brought about both opportunities and challenges, which require the country to adapt to the increasingly fierce competition in a world of free trade.
In the 2016-2020 period, most free trade agreements to which Vietnam is a signatory are witnessing significant reductions in taxes, and the removal of tariff barriers in imports and exports, thereby making it easier for Vietnamese goods to penetrate overseas markets.
Deputy Minister of Planning and Investment Nguyen Van Hieu said that aside from ensuring an environment of fair competition, these trade pacts also set out new requirements for competitive investment, public procurement and e-commerce, among others.
Hieu noted that such requirements are expected to produce direct and far-reaching effects on the national economy and its business community.
Therefore, according to the official, the country needs to push ahead with foreign direct investment (FDI) and create a more conducive investment environment.
Businesses should also actively enhance their governance and manpower training in order to promote integration into the international economy, he said.
Some experts shared the view that it will be challenging for many sectors with fast growth in 2018 to sustain their pace this year, including the processing industry, agro-forestry-fishery production, exports, the domestic market’s purchasing power, tourism, and real estate.
Meanwhile, some institutional bottlenecks relating to public investment or project financing forms of the build-transfer and build-operate-transfer formats that have not been dealt with are likely to affect the growth rate for this year.
Veteran economist Tran Du Lich, a member of the prime minister’s economic advisory group, told the delegates that the main problems facing Vietnam for many years to come will still be the quality of growth and institutional reforms amid complex developments in the global economy and trade.
Therefore, the Government’s economic and financial policies will still need to ensure both growth quality and pace, Lich noted, adding that the annual growth rate is likely to average 6.9% in 2019-2020 and 6.75% between 2016 and 2020.
He stated that thanks to the advantages in terms of economy and political stature, Vietnam can be regarded as an attractive destination for foreign investors. It has been working to perfect institutions, support private businesses, and promote the development of small- and medium-d enterprises to boost capitalization for economic development.
He recommended that the changes in mechanisms and policies, including those in the financial, monetary and banking sectors, should match the developments in the market.
Vietnam has good FDI prospects. However, institutional reforms are needed to achieve a breakthrough, said Vu Tien Loc, president of the Vietnam Chamber of Commerce and Industry.
He added that it is imperative to perfect the formal system of regulations and institutions, as well as issues related to the business environment, and to pay special attention to their enforcement.